This blog is affiliated with a course at the School of Journalism & Electronic Media at the University of Tennessee, Knoxville. I'll try to use it to share relevant news and information with the class, and anyone else who's interested.

Monday, March 11, 2013

Newspapers' Online Paywalls Show Promise?

One of the metered access (paywall) platforms available for newspapers is Press+, which has released some data on the 400-plus publishers using their platform. The numbers suggest that these paywalls are modestly successful - at least to the point where publishers are increasing subscription rates and reducing the number of "free" articles they make available before users hit the pay wall. They report that the average price for a monthly subscription has risen from $6.66 in July 2011 to $9.26 at the time of the survey. The number of "free" articles averaged 13 in January 2012, but has dropped to 10 in the latest report. In addition,The company suggests that rather than seeing online readership drop, publishers are feeling confident enough to push the business model for additional revenues.

What’s more, according to Press+ co-founder Gordon Crovitz, publishers are enjoying the benefits of increased circulation revenue without sacrificing any online advertising revenue; however Press+ didn’t release any figures on this score.

While this news might be encouraging, the research methodologist in me has to throw in a lot of caveats.
First, the release actually provides no numbers with respect to online ad revenues (as noted in the quote), subscription revenues, or subscription (circulation) numbers. Thus, there is no direct evidence provided in the report that online news paywalls are financially successful.
Second, there's a line in the report that the numbers are based on a survey of Press+ customers - but there's no indication that the same publishers participated in the surveys at the various times that numbers were reported from. (For example, the rise in "average" subscription may be the result of fewer responses frompublishers with lower subscriptions - who might also have dropped their paywalls). As such, its not clear the comparisons over time are valid.
Following up on that, I'll also note that the comparisons are aggregate - the survey apparently didn't directly ask respondents if they changed subscription prices or where the pay wall kicked in. (Or if in fact they did, the failure to mention that might suggest that those results weren't so rosy).
Finally, I'll note that even if the sample of Press+ publishers was random, the responding publishers are limited to Press+ customers, and thus are not necessarily representative of online newspaper publishers more generally. As such, any results are not generalizable.
As such, I'd say the story jumped the gun with the headline "Paywalls Pay Off," The results reported don't justify that conclusion.

For many of the same reasons, you shouldn't infer that the issues with this report suggest that paywalls aren't successful, either. Anecdotal evidence suggests some are - for example, the NY Times seems to be doing well on their current paywall approach (after several glaring failures). On the other hand, News Corp. recently closed down their paywall online newspaper, The Daily, citing low readership and high losses.
In spite of my caveats with respect to these specific numbers (and improper conclusions), I'll take this report as being in line with my own cautiously optimistic perspectives. That is, pay walls can be successful - particularly when publishers provide unique content of clear value to some set of users - but are less likely to be successful with generic news coverage that is widely available elsewhere.